Barclays ditches overdrafts for 'safety net'

Barclays is ditching unauthorised overdrafts on its current accounts to replace them with a 'safety net' that will cost £22 for every five days it is used.

Customers with authorised overdrafts will be given the option to use a Personal Reserve on top. This will not incur individual transaction fees or interest. The bank will write to all its customers over the next two months to advise them as to their individual Personal Reserve before it launches the facility on 18 August.

Credit ratings will be used to determine the Personal Reserve allowance, but the bank says the typical amount granted will be £250; those with poor credit ratings will be offered less. Customers can opt out of having a Personal Reserve and those who do want one will only be charged if they use it.

'We welcome the reduction in unauthorised overdraft charges and a simplification for customers,' said Which? chief executive Peter Vicary-Smith. 'We've long said that people want simple and transparent banking and Barclays is going in the right direction.'

However, the simplification may work out more expensive for customers who regularly exceed their agreed borrowing. Anyone exceeding their agreed overdraft for longer than five working days will be charged an additional £22 for every further five days up to their Personal Reserve limit. Above this limit, every bounced cheque or unauthorised transaction will be charged at £8 a time.

Barclays is also overhauling its whole current account range, cutting its 0.1 per cent credit interest to zero and increasing its authorised overdraft rate from 15.6 to 17.9 per cent from tomorrow. Anyone wanting interest paid on money in their current account will have to opt for the bank's new current account plus, which costs £3 a month and pays 3 per cent credit interest.

Travel insurance break for cancer patients

Male cancer sufferers who may have been turned down for travel insurance or faced exorbitant premiums are being offered a new policy called Insure Blue, the 'male' version of Insure Pink, which offers travel insurance to women who suffer from breast cancer or have a history of it. The male policy aims to offer affordable cover to men with testicular and prostate cancer.

'Some insurers charge cancer sufferers as much as £200 for insurance for a fortnight's holiday,' says Fiona MacRae, founder of Insure Pink and Insure Blue. 'People who have had cancer treatment just want to get on with their lives, and there's no reason why they shouldn't be able to be treated like other travellers.'

For a 55-year-old man and his partner, insurance for a two-week trip would cost around £58 with Insure Blue, which will donate £1 to Everyman, the male cancer charity, for every policy sold. The policy will be available via insureblue.co.uk and the website will go live on 11 June, as part of Everyman's male cancer awareness month. Women can purchase Insure Pink policies at insurepink.co.uk

Is your new mortgage really the best for you?

Almost half of all homeowners fail to shop around for a new deal when their existing special mortgage period expires, according to Abbey. Its research shows 49 per cent of mortgage holders end up sticking with their current mortgage provider when their deal expires.

'There is an obvious danger that you'll just end up settling for a deal which may not be the best if you don't shop around,' says David Hollingworth, of mortgage brokers London & Country.

For those looking for fixed rates, he recommends Loughborough building society's two-year fix, at 5.75 per cent with a £649 fee, or Nationwide's 5.75 per cent three-year fix with a £599 fee. For trackers, he suggests the Principality's building society's two-year tracker at 5.89 per cent (0.89 per cent above base rate) and HSBC's lifetime tracker at 5.63 per cent (0.63 per cent above base rate), both of which come with a £999 fee.

Kaupthing sharpens its edge on rates for savers

It's still a good time for savers, with three providers paying out 7 per cent interest on one-year fixed-rate bonds. Icelandic bank Kaupthing Edge recently increased the rate on its one-year bond from 6.86 to 7.01 per cent. The bond requires a £5,000 minimum deposit. IceSave is also paying 7.01 per cent interest on its one-year bond, while First Save gives 7.1 per cent. Both require £1,000 deposits.

'Serious savers can really benefit from these rates,' says Andrew Hagger from comparison site MoneyNet.co.uk. 'But you have to be really sure that you are happy to tie up your money for the duration of the bond.'

If you still want access to your cash, Hagger recommends a Birmingham Midshires instant access account, which pays 6.5 per cent on a £1 minimum deposit. For more, visit moneynet.co.uk